EU leaders meeting to finalise climate funding offer

EU leaders will today continue to discuss the level of climate funding European countries should pay into the fast-track international fund being proposed in Copenhagen.

Reports emerged yesterday that the offer is likely to be about €5.4bn (£4.48bn) with the Associated Press citing an unnamed French official who said that the EU looked likely to fall short of committing to the scale of funding wanted by the richer countries in the bloc.

He added that while the talks are ongoing, the figures being discussed yesterday suggested the EU would provide €1.8bn a year for 2010 to 2012, well short of the €2.2bn the European Commission had been hoping for.

The shortfall is believed to be the result of a reluctance on the part of poorer eastern European countries to pay into a fund that they fear will be diverted to emerging economies, some of which enjoy similar per capita levels of wealth to themselves.

The Brussels meeting came as the leading US negotiator at the Copenhagen Summit, Todd Stern, said the US would provide funding to help poorer nations tackle climate change. But he insisted any payments would not be recognised as "reparations" and were highly unlikely to be offered to China, even though it is formally recognised as a developing country at the Copenhagen talks.

Funding discussions at the Copenhagen summit currently centre on three proposed waves of funding to help poorer nations adapt to climate change and invest in clean technologies: a $10bn fast track fund that would start as early as next year and run for three years, a larger fund to run between 2013 and 2019, and a post-2020 fund that could exceed $100bn a year.

Any funding deal is likely to have major repercussions for green businesses as it would serve to accelerate the development of emerging markets and provide a fresh source of finance for climate-related projects in Africa, Asia and South America.

However, many of the proposed funding mechanisms currently being discussed face opposition from developing countries, which argue they are likely to need closer to $400bn a year from 2020 and insist they are not willing to sign up to the binding emission commitments that richer countries are demanding in return for funding.